Last week, lawmakers laid the groundwork for a battle over consumer rights and forced arbitration that likely will play out through the spring.

First, congressional Democrats introduced several bills to restore consumers’ right to hold corporations accountable in court for wrongdoing. Led by U.S. Sen. Al Franken (D-Minn.), lawmakers on March 7 introduced a slate of bills aimed at ending the use of forced arbitration in various sectors. Forced arbitration provisions, also known as “ripoff clauses,” block consumers from challenging illegal corporate behavior.

Lawmakers were joined at a packed press conference by people who had been harmed by forced arbitration: a veteran illegally fired from his job while serving in the military and blocked from suing his employer; a victim of Wells Fargo fraud whose class action was kicked out of court; and former news anchor Gretchen Carlson, barred from speaking out about sexual harassment she had suffered at Fox News.

Among the bills introduced were Franken’s Arbitration Fairness Act, which would prohibit forced arbitration in consumer, employment, civil rights, and antitrust cases and Sen. Sherrod Brown’s (D-Ohio) Justice for Victims of Fraud Act, which would close the “Wells Fargo loophole” by restoring consumers’ right to sue when banks open fraudulent accounts without their knowledge.

However, in stark contrast to this push to strengthen rights and restore corporate accountability, GOP lawmakers began pressing to make it harder for consumers to band together when harmed and take corporations to court.

Two days after the Franken press conference, the House passed H.R. 985, the so-called “Fairness in Class Action Litigation Act” would effectively kill class actions by imposing insurmountable requirements to file group lawsuits. This would make it nearly impossible for consumers to hold corporations accountable for illegal and abusive behavior.

Among other onerous provisions, H.R. 985 would require that each harmed person suffer the “same type and scope of injury.” Under this absurd standard, a Wells Fargo customer with two fake accounts opened in his or her name could be barred from joining together with customers who had three fraudulent accounts. The bill also would build in costly and unnecessary delays and appeals, limit plaintiffs’ choice of counsel, and drastically restrict attorneys’ fees.

Joining together in a class action often is the only chance real people have to fight back against widespread harm, including corporate fraud and scams – particularly when claims involve small amounts of money, where it would be too costly for an individual to pursue a separate claim. Class actions have also been critical vehicles for overcoming race- and gender-based discrimination and have been instrumental in achieving victories as momentous as desegregation of our schools, as was the case in Brown v. Board of Education.

Beyond protecting the rights of the disadvantaged, class actions act as a crucial check on corporate misbehavior by returning money to harmed consumers and workers. Removing the threat of class liability would encourage systemic fraud, as banks and lenders that pad their bottom lines by committing fraud would have a competitive advantage in the marketplace.

In the financial sector, the proposed CFPB arbitration rule is a major target of financial industry lobbyists precisely because it would restore the right of consumers to join class action lawsuits. According to the CFPB’s arbitration study, class actions returned $2.2 billion in cash relief to 34 million consumers from 2008-2012, not including attorneys’ fees and litigation costs. While the CFPB rule is expected to be finalized this spring, it would be rendered largely ineffective should H.R. 985 become law.

You can watch our video against H.R. 985 here and follow developments on Twitter using the hashtag, #RipoffClause.

Over the past month, Goldman’s share price has hovered above its previous all-time high which was set in late 2007, just before the worst financial crisis since the Great Depression hit the global economy. That’s a 42 percent increase since Trump’s election!

The business press knows why. Bloomberg News:The share price has rallied on optimism that the Trump administration “will spur trading and dealmaking, slash corporate taxes and roll back costly regulations after installing the firm’s executives in top government posts.”

Goldman Sachs alumni are assuming more powerful positions in Washington than ever before.

He’ll have plenty of company. There’s Gary Cohn, director of the National Economic Council in the Trump White House. And Treasury Secretary Steve Mnuchin, the former Goldman banker who lied to Congress about his role in the fraudulent processing of foreclosure documents.

Dina Powell is also in the White House, having been an adviser to Trump’s daughter, Ivanka, from her perch at Goldman. Trump’s close adviser and far-right media maven Steve Bannon also worked there. And, Trump’s nominee to run the Securities and Exchange Commission, Jay Clayton, has long been a Goldman lawyer from his perch at Sullivan & Cromwell.

“Cohn and Mnuchin are poised to preside over a rollback of financial regulations that arguably threatened Goldman more than any other top bank in the years following the financial crisis,” Bloomberg pointed out.

Even the Financial Times finds this level of self-dealing by Goldman embarrassing

“It is becoming awkward for Goldman,” writes longtime Financial Times columnist John Gapper. “Having former executives in governments and central banks around the world is useful, as is the prospect of looser regulation. Being visible at the helm is embarrassing, especially when executive power is clearly being used to Wall Street’s benefit.”

Goldman gave Cohn a severance package of nearly $300 million when he left the firm, a huge golden parachute that makes it even cushier for executives to work in the government.

“They’re playing a game, and they’re playing a game to make this person feel beholden to Goldman Sachs,” Richard W. Painter, a professor at the University of Minnesota Law School and former Bush administration official, told The New York Times.

Appointees are involved with policy affecting Goldman, no matter the “recusals”

Cohn has let it be known through anonymous sources that he will recuse himself from anything “directly” affecting Goldman. But the comment only underscores how serious the problem is. The White House isn’t supposed to involve itself in enforcement at all, nor should it jump into the regulatory process at independent agencies. So as a matter of course he should not be involved in this kind of matter “directly” involving the company. And what does “directly” mean?

He is already deeply involved in matters bearing on Goldman’s profits. He and Treasury Secretary Mnuchin are both working, for example, on plans to roll back the Volcker Rule, a regulation that protects the economy by barring big banks from speculating with their customers’ money. It also stops Goldman from profitable activities it would love to continue.

Twenty-three major American financial firms – including Goldman Sachs, JP Morgan Chase, State Street, PNC Bank, and Wells Fargo – received over $95 billion in tax benefits from 2008 to 2015, according to a new study. Loopholes in federal policy lowered their effective tax rate from the headline 35 percent to below 20 percent – a reduction that increases the fiscal burden on everyone else.

The Institute for Taxation and Economic Policy examined taxes paid by 258 Fortune 500 corporations over the past eight years, and how these taxes compared to what would be paid if these companies paid the full corporate tax rate of 35 percent.

The institute found that these companies enjoyed huge tax subsidies that lowered their tax rates far below the 35 percent rate set in the law,.

The 23 financial firms in the study – including such major banks as Goldman Sachs, JP Morgan Chase, State Street, PNC Bank, and Wells Fargo – received over $95 billion in total tax benefits over the study period.

Some $69 billion of these tax benefits were received by just four highly profitable banks: Wells Fargo, JP Morgan Chase, PNC Bank, and Goldman Sachs.

A few banks, such as State Street and PNC Bank, paid tax rates well under 10 percent. We do not have the data to determine precisely which tax loopholes created these massive benefits, although the ability to move profits to lower-tax foreign jurisdictions likely played a role. But one tax loophole that clearly was highly beneficial to many financial institutions was the ability to write off the giant stock option payments made to their top executives.

Goldman Sachs, for example, reduced its 8-year tax bill by almost 20 percent just using this one loophole.

As large as it is, this tax subsidy of nearly $100 billion is certainly a major underestimate of the tax benefits flowing to the financial sector.

Only 23 financial firms were included in the study, because it was limited to Fortune 500 public companies that had made profits — and therefore had tax liability — over every year in the study period. This rule meant that major banks like Citibank, Morgan Stanley, and Bank of America weren’t included in the study, to say nothing of numerous other companies that were either private companies or too small to be included.

This afternoon, lawmakers introduced several pieces of legislation to curb the growing use of “ripoff clauses” and ensure harmed consumers, service members, students, and workers have a right to fight back in court against corporate wrongdoing. Known as forced arbitration, this practice strips Americans of any meaningful way to hold companies accountable for fraud or abuse and grants corporations a license to steal to pad its bottom line.

Forced arbitration no place in any system that is fair to everyday people. The bills introduced today would work hand-in-hand with a rule proposed by the Consumer Financial Protection Bureau (CFPB) to restrict the financial industry’s use of forced arbitration. Below are the stories of several real people harmed by forced arbitration, who would benefit from this newly-introduced legislation and the proposed CFPB rule.

Credit Cards

Tracy Kilgore, New Mexico

In July 2011, Tracy Kilgore went to a local Wells Fargo branch to change a signature card on behalf of the Daughters of the American Revolution, where she volunteered as Treasurer. Tracy did not personally bank with Wells Fargo or have any accounts with them. The bank teller asked her for her name and ID and began typing away her computer, and she promptly left once the change was processed.

Two weeks later, Tracy received a letter from Wells Fargo saying her credit card application had been rejected, though she never applied for one. When she saw the application was filed the day after she had visited the Wells Fargo branch, it became clear the bank tried to open a fraudulent credit card in her name. After Tracy found the rejected application was listed on her credit report, she called and wrote to Wells Fargo for months asking them to remove it. The bank kept saying it would take another 7-10 days, then another 2-3 weeks, to no avail. In the end, she never even got an apology.

Now, Tracy has joined with other defrauded customers in a class action lawsuit against the bank, but Wells Fargo is trying to force each consumer to fight them one-by-one in a biased and secretive arbitration system. Even though Tracy has never banked with Wells Fargo, their lawyers are trying to block her from suing them in court by pointing to an arbitration clause she never signed.

Auto Financing

Sergeant Charles Beard, California

Sergeant Charles Beard was about to be deployed to Iraq and asked for some help making his car payments. His lender, Santander Consumer USA, Inc., offered him a forbearance for a few months, but in exchange, had Sergeant Beard sign a modified lease agreement. Little did he know, a forced arbitration provision was buried in the fine print.

While serving his country in Iraq, Sergeant Beard fell behind in his payments. Men came to his home and repossessed the car – breaking federal law, which protects active duty soldiers by requiring lenders to obtain court orders before seizing their cars. Sergeant Beard brought a class action against the lender with other soldiers to enforce their protections under federal law, but their claims were thrown out due to a class action ban in the arbitration clause.

Payday Loans

Stephanie Banks, Oregon

In August 2013, Stephanie Banks made $15 an hour as a bookkeeper for the Salvation Army. To help pay rent for her and her son, she took out a $300 loan from the payday lender Rapid Cash, putting up the title to her car as collateral. Her interest rate was capped at 153.73% per year under state law. Soon after, Ms. Banks started chemotherapy to treat her lung cancer and retired from her job. A year later, she was in serious financial trouble, and had to declare bankruptcy. She listed the loan from Rapid Cash as a debt to discharge and finished the process in court with a lawyer.

Then, in August 2015, Ms. Banks almost had a heart attack when she received a letter from a collection service, claiming she owed Rapid Cash over $40,000. They threatened to destroy her credit if she did not pay immediately. Ms. Banks filed a free motion in court to dispute the $40,000 claim. Rapid Cash responded by pointing to an arbitration clause, buried in the fine print of the original agreement she signed two years earlier. The court ruled the clause still held and Ms. Banks would have to argue her case to a private arbitration firm chosen by Rapid Cash. To do this, she would have to pay $200 in arbitration fees, almost as much as her original loan.

Debt Relief

Bernardita Duran, New York

Bernardita Duran was 53 years old with only $700 in Social Security income when she paid an Arizona debt relief company to settle her credit card debts. Four thousand dollars later, Ms. Duran realized she had been scammed. She sued the company in New York federal court to get her money back, but the company pointed to a clause in their contract which stated her claims must be decided a private arbitrator – located in Arizona.

Ms. Duran protested that she could not afford to travel to Arizona, as it would cost more than a month’s worth of her income and prevent her from making rent. But the appeals court ruled that only the arbitrator in Arizona could decide if Ms. Duran could bring her claim in New York – meaning she would have to first travel across the country to Arizona to argue to the arbitrator that it’s unfair and unconscionable to force her to arbitrate her case there.

Private Student Loans

Matthew Kilgore, California

Ever since he was a child, Matthew Kilgore wanted to be a helicopter pilot. Mr. Kilgore thought he was on his way to achieving his dream when he enrolled at Silver State Helicopters, a for-profit aviation school that offered pilot training and certification. At the school’s recommendation, Mr. Kilgore took out a $55,000 private student loan from lender Keybank to cover his tuition. But Mr. Kilgore’s ambitions came to a sudden end in 2008 when his school abruptly went out of business and filed for bankruptcy, leaving students with tens of thousands of dollars in student loans but no marketable skills or diplomas. Since then, his loans nearly doubled to $103,000 with accrued interest.

Mr. Kilgore filed a lawsuit on behalf of himself and other Silver State students against Keybank to prevent them from enforcing their loan agreements or ruining the students’ credit. However, Keybank loan contracts contained an arbitration clause which prohibited class actions. An appeals court ruled the students would have to settle disputes with Keybank individually in arbitration. Meanwhile, other Silver State students who had similar loans with Student Loan Express, Inc. got $150 million in debt relief because their loan agreements did not include an arbitration clause.

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This blog is maintained by AFR as a forum for ongoing news and commentary about the fight for effective financial reform. Blog posts represent the opinions of their authors / posters, and do not necessarily represent the views of the AFR coalition or coalition members.